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William S. Lee quality jobs and business expansion act : assessment of results

Page 1
Introduction
Overview
Over the past five years we have witnessed dramatic and unprecedented growth in North Carolina's
economy and unprecedented challenges. In the year 2000, the North Carolina Department of
Commerce tracked the announcement of 39,778 new manufacturing jobs, with $ 7.55 billion in
investment. We also noted that 33,314 people lost their jobs due to plant closings and permanent
layoffs. During the past five years, the William S. Lee Act has been the state's principal economic
development incentive tool. The Act represents North Carolina's effort to maximize creation of jobs
by new and expanding industries and to minimize job loss due to companies reducing their workforce
or relocating. This Report assesses the Act's effectiveness in achieving those goals.
Background of the Act
The General Assembly passed the William S. Lee Quality Jobs and Business Expansion Act in 1996.
The Act provided for a modest expansion of North Carolina's incentives programs. It established
several new incentives designed to reduce the costs to business of undertaking an expansion in the
state or setting up a new location, with the goal of encouraging new job creation for our citizens, inducing
new investments strengthening the ability of existing businesses to compete in the New Economy and
improving North Carolina's competitive position in recruiting and retaining businesses.
When the Lee Act was enacted, policymakers were concerned about the structural changes North
Carolina's economy was experiencing: traditional North Carolina companies, like textiles, apparel,
furniture and tobacco manufacturing were downsizing or closing at an increasing rate. These plant
closings were having a disproportionately negative impact on the more rural and economically
distressed parts of our state. At the same time, other states were increasing their use of incentives to
encourage business expansions and new plant locations. The combination of these factors threatened
North Carolina's overall business climate.
In response to these challenges, legislators designed the Lee Act, identifying specific types of business
that should be eligible for the credits and specific sorts of activities that businesses should receive credit
for engaging in, with different incentives offered to counties dependent on their level of economic distress.

Page 1
Introduction
Overview
Over the past five years we have witnessed dramatic and unprecedented growth in North Carolina's
economy and unprecedented challenges. In the year 2000, the North Carolina Department of
Commerce tracked the announcement of 39,778 new manufacturing jobs, with $ 7.55 billion in
investment. We also noted that 33,314 people lost their jobs due to plant closings and permanent
layoffs. During the past five years, the William S. Lee Act has been the state's principal economic
development incentive tool. The Act represents North Carolina's effort to maximize creation of jobs
by new and expanding industries and to minimize job loss due to companies reducing their workforce
or relocating. This Report assesses the Act's effectiveness in achieving those goals.
Background of the Act
The General Assembly passed the William S. Lee Quality Jobs and Business Expansion Act in 1996.
The Act provided for a modest expansion of North Carolina's incentives programs. It established
several new incentives designed to reduce the costs to business of undertaking an expansion in the
state or setting up a new location, with the goal of encouraging new job creation for our citizens, inducing
new investments strengthening the ability of existing businesses to compete in the New Economy and
improving North Carolina's competitive position in recruiting and retaining businesses.
When the Lee Act was enacted, policymakers were concerned about the structural changes North
Carolina's economy was experiencing: traditional North Carolina companies, like textiles, apparel,
furniture and tobacco manufacturing were downsizing or closing at an increasing rate. These plant
closings were having a disproportionately negative impact on the more rural and economically
distressed parts of our state. At the same time, other states were increasing their use of incentives to
encourage business expansions and new plant locations. The combination of these factors threatened
North Carolina's overall business climate.
In response to these challenges, legislators designed the Lee Act, identifying specific types of business
that should be eligible for the credits and specific sorts of activities that businesses should receive credit
for engaging in, with different incentives offered to counties dependent on their level of economic distress.